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Amazon Go has a real rival in Japan - and its stock is soaring

Tokyo Inc is betting that stores of the future won't have any clerks or registers. A company in Japan thinks it can get there first.

Signpost Corp, with a staff of about 100, has already deployed its technology in a kiosk on the platform of a train station in Tokyo. It is an ideal testing ground: a space no bigger than a bedroom with dedicated entry and exit points, and commuters in a hurry.

The shares of Signpost, which is planning to unveil a product deal with a major retail chain by the end of this year, climbed 9.3 per cent to 5,460 yen (S$65) at the close on Thursday, a record since the company's market debut a year ago.

Cameras and artificial-intelligence software track merchandise and purchases. Founder Yasushi Kambara calls it the "Super Wonder Register", and says the system can be installed in any store.

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Investors are impressed. Shares of Signpost, which went public last year, have jumped more than 50 per cent since it unveiled the store early last month.

The seamless shopping experience is almost identical to that at Amazon Go, the web retailer's cashierless pilot store in Seattle.

Mr Kambara said: "There are already automated highway tolls and turnstiles at train stations. In the same way, we want to automate store registers. That's my dream."

At stake is a smart-store market that is projected to process more than US$78 billion in annual transactions by 2022, said Juniper Research.

Amazon's chief executive Jeff Bezos is also wagering that seamless shopping is the future of retail. The e-commerce company is said to be planning for up to 3,000 Amazon Go outlets in the next few years.

An Amazon spokesman declined to comment on Signpost's new store.

Signpost will begin selling its product to Japanese and overseas convenience stores, supermarkets and train station kiosks next year. Mr Kambara says it will cost a retailer about 100 million yen (US$880,000) to install the Super Wonder Register system in a supermarket about 500 sq m in size. He predicts that Signpost will install 30,000 systems in Japan by February 2021, including the Wonder Register, a simpler checkout terminal that identifies products using cameras.

From Alibaba Group Holding Ltd to Tencent Holdings Ltd and BingoBox, Chinese companies are experimenting with their own smart stores. Tencent opened a 300 sq m "We Life" outlet this year; Alibaba set up a cashierless cafe in Hangzhou.

In Japan, Signpost may come up against some early competition: San Francisco-based startup Standard Cognition is planning to roll out its camera-based automatic checkout technology with the goal of being in 3,000 retail locations by 2020.

Japan's retail market is potentially an exciting market for automated checkouts, given the chronic shortage of clerks; there are more than 55,000 convenience outlets offering snacks, drinks, packaged food and banking and delivery services.

Tomoaki Kawasaki, an analyst at Iwai Cosmo Securities Co, said Signpost is probably the only company besides Amazon that can provide the know-how. The labour shortage will also spur adoption, he said. "They're very fast at developing this technology," he said.

So far, Signpost is winning over customers for the sheer ease of using the electronic payment card used for rail fares to pay for their purchases at its store.

Mr Kambara said: "Amazon won't share their Go technology with others. They're going to try and kill off existing retail stores, so we want to give retail shops the weapons they need to fight back." BLOOMBERG

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